Owens Electronics has nine operating plants in seven Southwestern states. Sales for last year were $100 million,

Owen’s Electronics has nine operating plants in seven Southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity.

Owen’s has an after-tax profit margin of 10 percent and a dividend payout ratio of 45 percent.
If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance thegrowth.

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Balance Sheet (in S millions) Assets Liabilities and Stockholders' Equity Cash Accounts receivable. Inventory S7 Accounts payable 25 Accrued wages 28 Accrued taxes S60 Curent liabilities 45 Notes payable S20 13 S40 15 20 30 Current assets Fixed assets Common stock Retained earnings Total liabilities and Total assets S105 Stockholders' equity S105